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Judge dismisses Shays, Meehan 527 suit

A district court judge Thursday dismissed a case against the Federal Election Commission (FEC) that would have compelled the agency to set rules for outside 527 groups.

The ruling places the burden back on Congress to impose new constraints on the powerful groups before the 2008 election season begins in earnest.

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Rep. Chris Shays (R-Conn.), who brought the suit against the FEC with former Rep. Marty Meehan (D-Mass.), expressed disappointment in the decision and called on Congress to pass a bill limiting the activities of 527s as soon possible despite a crowded fall congressional calendar.

“I am disappointed the FEC may continue to ignore the campaign finance laws as written and instead will review 527s on an arbitrary basis,” Shays said. “[The decision] reinforces the fact that we need legislation to force 527s to play by the same campaign finance rules, which apply to all other organizations seeking to influence federal elections.”

Right now the FEC monitors 527s such as MoveOn.org and Swift Vets and POWs for Truth on a case-by-case basis, and the ruling ensures that it can continue to operate in this manner unless Congress intervenes with legislation creating new rules.

The 527 groups spent millions of unregulated soft money in the 2004 presidential election. Many lawmakers do not like the groups because the Bipartisan Campaign Finance Reform Act of 2002 took away their ability to operate 527s of their own.

Shays and Meehan filed the suit three years ago and during the past year, the FEC has levied fines against a number of these groups, including Swift Vets and POWs for Truth, a GOP operation, as well as Americans Coming Together (ACT), a liberal organization. On Wednesday, the FEC reached a $775,000 settlement deal with ACT for using unregulated soft money illegally.

Advocates for changing the 527 law said the ruling was not a total victory for the FEC because it forced the agency to take the issue seriously. Gerry Hebert, executive director of the Campaign Legal Center, argued that the court only decided to dismiss the case because it was legally required to show strong deference to the agency because the matter of regulating 527 groups fell largely within the agency’s discretion.

“While the ultimate result is disappointing, the repeated reprimands by the court during the course of this case spurred the FEC to take enforcement action against a number of 527 groups,” Hebert said. “In addition, the lawsuit forced the agency to explain and justify its approach to dealing with 527 organizations.”

Hebert stressed that the ball is now in Congress’s court to pass 527 reform legislation.

“The FEC has proven too politically freighted to be given unbridled discretion to formulate its own regulations,” he said.